WASHINGTON, DC—When it
comes to educating kids about financial matters, how much do parents
really know and are they stepping up to the plate? A new survey
released today finds parents overestimate how much they know about finances and underestimate the role they can play in teaching their children about money management.

The 2001 Parents, Youth & Money Survey,
underwritten by the TIAA-CREF Institute, was released today by the
American Savings Education Council (ASEC), the Employee Benefit
Research
Institute (EBRI), and Mathew Greenwald & Associates. The survey
shows that the majority of parents feel confident about their
understanding of financial matters (51 percent say they
understand them very well, 46 percent fairly well), and most think they do a good job of managing their money (25 percent think they do an excellent job and 57 percent think they do a good job).

Yet, many of their actions
and behaviors contradict this self-assessment. For instance, 55 percent
of parents roll over credit card debt each month. When asked where they
would put or advise their child to put $5,000 to save for education or
some other long-term goal, 58 percent do not identify specific
long-term investment vehicles such as mutual funds or stocks that
historically offer higher rates of return. Instead, more than 1 out of
3 parents cite low-yielding certificates of deposit (CDs), savings
accounts, and savings bonds. Twelve percent say they would put savings
in a bank or savings and loan, but are unable to articulate a specific
type of account. Finally, less than half
(45 percent) of all parents say they make a budget and stick to it most
of the time.

“Our 1999 Youth & Money Survey
found that 94 percent of students turn to their parents for financial
education and guidance,” said Dallas Salisbury, ASEC chairman and CEO.
“The bottom line is that most parents, on a regular basis, likely have
a major impact on the financial attitudes and behavior of their kids –
both positive and negative.”

Interestingly, the 2001 Parents Survey shows that most parents do not think it is their sole
responsibility to educate their kids about finances. Thirty-eight percent of parents feel it is
exclusively their duty to teach financial education to their children, 61 percent feel it is the
responsibility of both
the parents and the child’s school, and less than 1 percent feel it is
strictly the school’s responsibility. In addition, when asked to
specifically describe what they have done to teach their kids about
financial matters: 56 percent of parents can name only one example;
31 percent cite two examples; and 8 percent say “nothing” or “don’t
know.” Ironically, 81 percent of parents who feel they do a fair or poor job of managing their money still consider themselves effective in giving their kids financial advice.

“Parents must get educated
about money management if they want to pass on effective financial
lessons and skills to their children,” said Don Blandin, president of
ASEC. “Too many students are graduating from high school with no
understanding of the basic principles of earning, saving,
budgeting, debt, and investing.”

The 2001 Parents Survey
shows that many parents are missing day-to-day opportunities to engage
their children in conversations about money management. Here are some
ideas for parents to help kids become savvy savers and consumers:

Discuss family financial matters (e.g.,
family budget, allowances, routine shopping, purchase of a new car or
home, planning a vacation, paying for college, etc.) with your children.

Talk to your kids about their future job or business ownership prospects.

Discuss with your children what options they have when they receive a monetary gift
(e.g., saving, investing, giving to charity, etc.).

“We hope these
important research initiatives will help parents and children recognize
the
enormous value of understanding everyday financial basics,” said
Madeleine d’Ambrosio, executive director of the TIAA-CREF Institute.
“Furthermore, we hope that financial service providers, K-12 teachers,
financial advisors, and youth leaders will strive to develop, provide,
and employ tools and resources to strengthen family financial
literacy.”

In conjunction with the 2001 Parents Survey,
ASEC and the TIAA-CREF Institute have created the following tools to
help educate parents and kids about financial matters: "Money Talk"
pamphlet series, Youth & Money Poster, Interactive Savings Goal
Calculator, and Piggy Bank Wrapper. All tools are available on the ASEC
and TIAA-CREF Institute Web sites at: www.asec.org and www.tiaa-crefinstitute.org

_______________________________________________

The 2001 Parents, Youth & Money Survey
gauges the views, attitudes, and behavior of American parents regarding
various financial issues, their savings and investing habits, and their
interactions with their children regarding money. The survey was
conducted within the United States from Jan. 4 to Jan. 30, 2001,
through 19-minute interviews with 1,000 individuals who have primary
responsibility for one or more children between the ages of 6-17.
According to data from the U.S. Department of Commerce, Bureau of the
Census, in 1998 there were 102,528,000 households in the United States.
Of those households, 34,760,000 (34 percent) had children under the age
of 18. The 1999 Youth & Money Survey gauges the views,
attitudes, and behavior of 1,000 students ages 16-22 about personal
finance. In theory, a sample of 1,000 yields a statistical precision of
plus or minus 3 percentage points (with 95 percent certainty) of what
the results would be if all households with children ages 6-17 were
surveyed with complete accuracy. (Subgroup responses have larger
margins of error, depending on the size of the group.)

EBRI
was founded in 1978, with the mission to contribute to, to encourage,
and to enhance the development of sound employee benefit programs and
sound public policy through objective research and education. EBRI is a
private, nonprofit, nonpartisan public policy research organization
based in Washington, DC. EBRI does not lobby and does not take
positions on legislative proposals.

ASEC is a
coalition of private- and public-sector institutions that undertakes
initiatives to raise public awareness about what is needed to ensure
long-term personal financial independence. ASEC works through its
partners to educate Americans on all aspects of personal finance and
wealth development, including credit management, college savings, home
purchase, and retirement planning. ASEC develops and distributes
educational materials, all of which are available in hard copy and on
the ASEC Web sites: www.asec.org and www.choosetosave.org ASEC is a program of the EBRI Education and Research Fund.

Mathew
Greenwald & Associates, Inc. is a full-service market research
company with an expertise in financial services research. Founded in
1985, Greenwald & Associates has conducted public opinion and
customer-oriented research for more than 100 organizations, including
many of the nation's largest companies and foremost associations.

TIAA-CREF
Institute is dedicated to the pursuit of knowledge on issues that
significantly impact lifelong financial security. Fields of study
include: pensions and retirement; health, life and long-term care
insurance; investment products and strategies; endowments and planned
giving; higher education financing and trends; corporate governance;
and financial literacy. For more information about the Institute's
work, visit: www.tiaa-crefinstitute.org